|
|
|
|
Trust This.
By Joseph E. Seagle, Esq. ● Aug 12, 2022
Smart Brevity® count: 3 mins...834 words
👋 Happy Friday everyone! We’re on our way to Asheville for some ⛰️ mountain air, and 🆒 cooler weather. If you like what you 👓 see, be sure to give me some feedback below.
|
|
1. big deal: A new rent stabilization ordinance
The Orange County Board of Commissioners voted 4 to 3 to let voters decide in November whether we need a new rent stabilization ordinance.
Why it matters: This is the first ordinance of its kind to make the ballot in Florida’s history. It would control rent increases for one year on about 100,000 of the 230,000 rental units in Orange County.
The one-year rent stabilization portion of the ordinance prohibits landlords from increasing rent more than once in any 12-month period. The increase cannot be more than the Consumer Price Index, which was 9.8% between June 2021 and June 2022. This limitation applies even when a new tenant takes over a vacant housing unit, meaning that the rent cannot increase from one tenant to the next more than the CPI.
Yes, but: The ordinance only affects “residential rental units” located in multi-family housing structures of four-or-more units. It does not apply to landlords of single-family homes, duplexes, or triplexes or 10 other exempted types of properties.
-
Landlords of multi-family residential rental units will have to register those units with the Orange County Planning, Environmental and Development Services Department so the Department can ensure compliance with the ordinance.
-
The registration statements will require a lot of information about the units, occupancy, rental rates, tenants’ names and addresses, move-in/out dates, and a lot of other information that landlords must retain for 2 years.
Landlords may request an exception to the rent increase restrictions by showing factors such as increases in property taxes, maintenance and operating expenses, capital improvements, and so on if those impair their “fair and reasonable return on investment.”
Our thought bubble: Tenants in large apartment complexes may see a touch of relief for a year until the ordinance expires … assuming it passes in the first place.
|
|
2. Reverse mortgages dying
The reverse mortgage industry and rising interest rates may be killing the industry for these types of mortgages.
Reverse mortgages were created during the Reagan administration to provide a way for seniors to tap into their home’s equity without incurring monthly mortgage payments.
The mortgages are designed for homeowners over 62 years old. The loan amounts are based on the property’s current value and negatively amortize based on the borrower’s life expectancy. They must be paid off within six months after the borrower’s or the borrower’s surviving spouse’s death.
Over time, however, they have been a source of exorbitant fees for the loan originators, and are often targeted at poor elderly homeowners in low-income neighborhoods with homes in disrepair.
The fees and fraud reached a nadir in the mid-2000’s. Since then the number of reverse mortgages has dropped to only four percent of all mortgages. The volume of new reverse mortgages is not enough to sustain the industry that has been built around originating and servicing these loan types.
Most seniors use reverse mortgages to pull cash out of their homes to use to pay taxes or make repairs on the home.
-
Fees for the origination of the loan, closing costs, plus the FHA insurance premium, and any payoffs of existing liens on the property come out of the funds left over to be given to the borrower.
-
This leaves little for the borrower at closing, negating the purpose of taking out the loan.
-
Rising interest rates mean the amount negatively amortizing back into principal due each month will increase faster, adding insult to injury for the borrower.
The bottom line: Reverse mortgages will likely go down in history as another well-intentioned policy that created an industry that destroyed itself with greed.
Go deeper at The Orange County Register
|
|
-
No flood of short sales is in our future based on the latest numbers showing that less than 3% of mortgages are seriously underwater. And the numbers are improving monthly. DSNews
-
After getting out of the iBuyer biz last year, Zillow is going back into the business (a little) with Opendoor. The two entered a partnership where Zillow sellers will be able to request and offer from Opendoor to buy the property via Zillow’s website. Inman
-
How quickly the tides have changed. Here are five realities to brace for if you’re selling a home today. Realtor
-
The housing market just seriously shifted, and sellers better get real, real quick. Realtor
-
As we’ve said here recently, interest rates are up, but adjustable rate mortgages are way up. CoreLogic
|
|
Hurricanes have destroyed this backyard bush (and its flowers) several times over the past decade, so whenever they're flourishing, it's a good sign.
Today’s roadtrip has me singing this one in the car as I balance my laptop in my lap, and avoid dog slobber from the backseat residents.
|
|
We hope you found this helpful — any feedback is appreciated and can be shared by hitting reply or using the feedback feature below.
Be on the lookout for our next issue! 👋
|
|
|
|
Was this edition useful?
 
Your responses are anonymous
|
|
|
Powered by
|
|
|
